Jamison v. Access World (U.S.), LLC, 758-2021

CourtCourt of Special Appeals of Maryland
Writing for the CourtWELLS, C.J.
PartiesRICHARD JAMISON v. ACCESS WORLD (USA), LLC
Docket Number758-2021
Decision Date07 June 2022

RICHARD JAMISON
v.

ACCESS WORLD (USA), LLC

No. 758-2021

Court of Special Appeals of Maryland

June 7, 2022


Circuit Court for Baltimore City Case No. 24-C-20-002773

Wells, C.J., Leahy, Eyler, Deborah S. (Senior Judge, Specially Assigned) JJ.

OPINION [*]

WELLS, C.J.

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This appeal arises from a contract dispute in which appellee, Access World (USA) LLC ("Access World"), terminated a consulting contract with appellant, Richard Jamison ("Jamison"), based on its belief Jamison had breached. Jamison disagreed and sought payment he believed he was owed under the contract. The parties submitted the dispute to binding arbitration and hearings were held in May and June 2020 before a three-member arbitration panel (the "Panel"). The Panel held that Jamison breached, but that Access World owed Jamison annual bonuses for 2016 and 2018. Jamison moved for modification of the award, submitting new evidence in support of his entitlement to a bonus for 2019. The Panel denied the motion. Jamison moved to vacate the Panel's award in the Circuit Court for Baltimore City. The circuit court affirmed the Panel's award and Jamison timely appealed, presenting the following issues which we have consolidated and rephrased for clarity[1]:

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I. Did the Panel exceed its authority or manifestly disregard existing law in declining to reconsider whether Jamison was owed a bonus for 2019
II. Did the Panel exceed its authority or manifestly disregard existing law in finding Jamison breached the contract with Access World

For reasons we explain, we answer "no" to both questions and affirm.

PROCEDURAL AND FACTUAL BACKGROUND

On April 1, 2015, Jamison and Access World[2] entered into a contractual agreement ("the Agreement"), under which Jamison, through his company Ruxton Services, would provide consulting services to Access World. In exchange, Access World would pay Jamison a monthly salary and annual bonuses. The annual bonuses were to be $50, 000 less the "adjusted net profit" Ruxton Services realized for that year. In February 2018, Access World terminated the Agreement based upon its belief that Jamison had competed with Access World in breach of the Agreement. Access World alleged Jamison had engaged in prohibited competition by not referring to Access World opportunities for a cargo of waelz oxide, a cargo of manganese, a sublease of Jamison's warehouse space, and a cargo of poultry vitamins. Jamison countered that he did not ultimately compete with Access World, and thus Access World's termination of the Agreement was itself a breach. Jamison also claimed he was still owed annual bonuses for the years of 2015 through 2019.

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The parties submitted the dispute to binding arbitration consistent with the terms of the Agreement. A panel of three arbitrators-the Honorable Judge Joseph F. Murphy (Retired), the Honorable Judge Richard Sothoron (Retired), and Nathanial Fick, Esquire- held hearings on the breach of contract issue over three days in May 2020. On May 20, the Panel issued an opinion concluding Jamison had breached the non-compete provision of the Agreement, but nonetheless awarded him $139, 383.00. Jamison moved to modify and correct the Panel's award on May 26, and after a host of additional motions and responses were filed, the Panel held an additional full day hearing on August 4, 2020 on the issue of Jamison's entitlement to annual bonus payments.

The Panel issued its ruling on October 1, 2020, rendering an award to Jamison in the reduced amount of $100, 000.00 in damages for annual bonus payments: $50, 000.00 for 2016 and $50, 000.00 for 2018. The Panel denied Jamison award of bonus payments for 2015 and 2017. The Panel concluded that the determination of payment of a bonus under the parties' contract required a tax return, as the amount of each potential bonus payment was to be determined by subtracting Ruxton Services' net profit[3] for that year from $50, 000.00. Jamison had not filed his 2019 tax return at the time of the August 4 hearing, nor by the time the October 1 opinion was issued.[4] Accordingly, the Panel did not rule on his entitlement to a bonus for 2019, but said that Jamison "has the right to assert a claim

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for a bonus in the year 2019" and that whether he should be awarded a bonus, and the amount of that bonus, should be resolved by the same method the Panel used in making determinations for years 2015 through 2018. (Emphasis in original).

On October 20, 2020, five days after Jamison filed his 2019 tax return, he filed a motion for modification or clarification with the Panel on the matter of a 2019 bonus payment. Jamison reported that his 2019 tax return indicated a net profit of -$4, 368.00, and thus he was entitled to a $50, 000.00 bonus for that year. Jamison also advised that he had submitted a copy of the return to Access World and requested an agreement on the numbers therein but had not received a response. The Panel denied the motion without comment the next day.

Jamison filed a second amended petition to vacate the arbitration award[5] to the Circuit Court for Baltimore City on November 6, 2020. A hearing was held before the Honorable Judge Yvette Bryant on June 11, 2021, and on July 9, 2021, the circuit court issued its judgment confirming the panel's award of $100, 000.00 to Jamison. Jamison timely appealed to this Court.

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STANDARD OF REVIEW

While "[a]n appellate court reviews without deference a trial court's ruling on a petition to vacate an arbitration award," Prince George's Cnty. Police Civilian Emps. Ass'n v. Prince George's Cnty. ex rel. Prince George's Cnty. Police Dep't, 447 Md. 180, 192 (2016), "judicial review of an arbitration award is very narrowly limited." Id. (quoting Downey v. Sharp, 428 Md. 249, 268 (2012)). Essentially then, when as here, a trial court has affirmed an arbitration award, our review is focused on the arbitrator's decision itself, and that review is very deferential. "Courts generally defer to an arbitrator's findings of fact and applications of law. Mere errors of law and fact do not ordinarily furnish grounds for a court to vacate . . . an arbitration award." Id. Likewise, "[t]he fact that arbitrators may fail to follow strict legal rules of procedure and evidence is not a ground for vacating their award." Chillum-Adelphi Volunteer Fire Dep't, Inc. v. Button & Goode, Inc., 242 Md. 509, 518 (1966). In the case of an arbitrator's contract interpretation, our Court of Appeals has quoted the Supreme Court in saying "the courts have no business overruling [the arbitration award] because their interpretation of the contract is different from [the arbitrator's]." Prince George's Cnty. Police Civilian Emps. Ass'n, 447 Md. at 193 (quoting United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599 (1960)) (alterations in Prince George's Cnty. Police Civilian Emps. Ass'n). In short, "a party seeking to set [an arbitrator's decision] aside has a heavy burden," as "the standard of review of arbitral awards is among the narrowest known to the law." Letke Sec. Contractors, Inc. v. United States Sur. Co., 191 Md.App. 462, 472 (2010) (internal quotation marks and citation omitted).

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The Maryland Uniform Arbitration Act ("MUAA") is set forth in Maryland Code (2006 Repl. Vol., 2011 Supp.), §§ 3-201 et seq. of the Courts and Judicial Proceedings Article ("CJP"), and "expresses the legislative policy favoring enforcement of agreements to arbitrate." Walther v. Sovereign Bank, 386 Md. 412, 424 (2005) (quoting Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139, 146 (2003)). "When parties to an arbitration agreement have not established rules of procedure to govern the arbitration, the procedural provisions of the MUAA control." Mandl v. Bailey, 159 Md.App. 64, 87 (2004).[6] Section 3-224(b) outlines the limited grounds for vacation of arbitration awards:

The court shall vacate an award if:

(1) An award was procured by corruption, fraud, or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral, corruption in any arbitrator, or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown for the postponement, refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the provisions of § 3-213 of this subtitle, as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement as described in § 3-206 of this subtitle, the issue was not adversely determined in proceedings under § 3-208 of this subtitle, and the party did not participate in the arbitration hearing without raising the objection.
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Md. Code Ann., CJP § 3-224(b). Jamison avers vacation of the Panel's award is required because the Panel "exceeded its powers" under § 3-224(b)(3). Unlike the merits of an arbitrator's award, which are accorded great deference by the reviewing court, "when the arbitrators' very authority to adjudicate the dispute is challenged, such obedience to the arbitrators' assertion of jurisdiction is clearly inapt." Stephen L. Messersmith, Inc. v. Barclay Townhouse Assocs., 313 Md. 652, 660 (1988).

I. The Panel did not "exceed its powers" in declining to reconsider whether Access World owed Jamison a $50, 000.00 bonus for 2019.

A. Parties' Contentions

Jamison contends that prior to the Panel's issuance of its October 1, 2020 award, there "was no requirement for consideration of information set forth in [Jamison's] tax return as the contract did not mention it." And because Jamison's tax return was not due until October 15, and he was not aware he would need it to prove he was owed a bonus for 2019, he had no opportunity to provide the required information prior to the Panel's award. Thus, he asserts, the Panel...

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